• Jul 7th 2011 at 2:01PM
  • 9
Part of the Saab gambit for survival has been approved by the European Investment Bank. Saab's parent company, Swedish Automobile, has been requesting approval for a plan to sell part of the property that its factory sits on in Trollhättan to a group of real estate investors led by Hemfosa Fastigheter and then lease the land back. The transaction has been given final approval by not only the EIB, but also the Swedish government and the country's National Debt Office.

It's sure to be a sigh of relief for Saab, as the purchase of 50.1 percent of shares in Saab Property AB gives an infusion of 205 million Kronor (around $32.4M USD) which helps in the ongoing discussions with suppliers as Saab aims to restart production. Saab says it is going to take advantage of the traditional summer shutdown to get its house in order with suppliers and other short-term funding sources, and it aims to restart production by Tuesday, August 9. Check out more details in the official release after the jump.

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SAAB AUTOMOBILE UPDATE ON PRODUCTION AND SALE AND LEASE BACK OF SAAB PROPERTY


Zeewolde, The Netherlands, 7 July 2011 - Swedish Automobile N.V. (SWAN) announces that Saab Automobile AB (Saab Automobile) obtained final approval from the EIB, the NDO and the Swedish government for the sale and lease back of the Saab property.

The consortium of Swedish real estate investors led by Hemfosa Fastigheter, and including among others, Brinova Fastigheter AB, PEAB and Weland Fastigheter will purchase 50.1% of the shares in Saab Property AB for a total consideration of SEK 255 million, reflecting an adjustment to the transaction price for a one year lease free period. Of the SEK 255 million consideration, SEK 205 million will be paid in cash on closing and the remaining SEK 50 million in the form of a sellable bond convertible into shares of the purchasing company. The investors have the right to increase their commitment to SEK 300 million within 30 days after closing on similar terms. The parties will proceed to closing the transaction today.

With this transaction SWAN and Saab Automobile will have raised about EUR 61 million in additional funding commitments over the past weeks. Saab Automobile continues its discussions with its suppliers on materials supply and commercial terms and is close to reaching agreements. SWAN and Saab Automobile continue their discussions with several parties to obtain further short-term funding to be able to restart and sustain production, including completion of a drawdown under the EIB loan facility.

Given the fact that some of Saab Automobile's suppliers require a longer lead time to resume adequate supplies and the delay as a result of the summer shutdown period at many of Saab Automobile's European suppliers, Saab Automobile plans to restart production by Tuesday August 9, provided that the above criteria are met.


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    • 1 Second Ago
  • 9 Comments
      Alex740
      • 4 Years Ago
      Saab has been proclaimed "dead" countless times in the past two years, let alone the past 2 decades, but that small little company continues to prove everyone wrong and somehow survives while larger brands have not been so lucky. Looks like they still have hurdles ahead of them but they definitely seem to be "The Little Engine That Could" of the auto industry.
        kevsflanagan
        • 4 Years Ago
        @Alex740
        I was thinking the same thing in terms of "The lil engine that could" reference. Its a alright product just needs to refind its niche and attack it.
      F1tifoso
      • 4 Years Ago
      Advertise the 9-4x, mention they have the 9-3, and sell some 9-5's to the New Englanders that used to buy Saab!
      F1tifoso
      • 4 Years Ago
      Someone play the Rocky music (when he is all but dead but comes back swinging!) They need to advertise the 9-4x and 9-3x - and it will take sales of the 9-5 to loyalists up north as well
      chest rockwell
      • 4 Years Ago
      So they sold off half of their property assets for a measly $32 million? And then they're going to pay to lease it back? And they are in a shut down until (maybe) early August? Yikes...... I think F1tifoso is right - they need to get cars to market and start digging into sales of competitors (I think Subaru would be a good target audience to start with).
      Sylvie
      • 4 Years Ago
      Second only to the ill-fated AMC Gremlin, Saab continues its efforts to prove that "ugly" sells. Someone once said that the definity of 'insanity' is to do the same thing repeatedly and expect a different result.
      Sylvie
      • 4 Years Ago
      Second only to the ill-fated AMC Gremlin, Saab continues its efforts to prove that "ugly" sells. Someone once said that the definity of 'insanity' is to do the same thing repeatedly and expect a different result.
      AngeloM
      • 4 Years Ago
      I hope it's not too late for Saab to get its act together. The best course of action would be an infusion of money from a Chinese manufacturing partner. Saab needs to develop an entry level car (around $20,000 US dollars). The new, small Saab could be somewhat retro, borrowing on the 1960s era Saab 96. Make it basic, reliable, inexpensive transportation to attract new buyers to the Saab family. Without an entry level model, Saab loses out on "walking customers up the ladder" to their more expensive models. As a sidenote, General Motors could have and should have merged Saturn cars into the Saab nameplate. The Astra could have been tweaked and rebranded as a Saab 9-1 or 9-2. The Saturn Sky could have been given a Saab styling treatment and become the new Saab Sonnet. Again----instant broader model line and more customers. But the folks at GM are very thick. I guess it's good that Saab escaped GM's stubborn affinity for failure.